No Marketing Budget? via @dudonwai

Posted on January 21, 2016 at 3:00 PM

No Marketing Budget

It’s the start of 2016, and by now you have an idea of how much you can spend this year on attracting new customers and growing your business. In this brief post, I’ll discuss a few options you have for growing your business, at little to no cost!

CAC & LTV

First off, I want to frame this post around the concepts of customer acquisition cost (CAC) and lifetime value (LTV). CAC measures how much your company spends to convert a person into a customer. LTV represents the monetary value that a company receives for having each customer.

If LTV > CAC, your business is profitably acquiring new customers. But as a general rule, you want LTV/CAC > 3 for a quick payback period for the acquisition. Lots has been written about this, so if you need, you can search for more on this yourself.

Using these concepts, you’ll be able to see that the following list has minimal CAC but has high upside in LTV:

  • Volunteer
  • Network
  • Promotional Events
  • Be An Expert
  • Targeting

Volunteer

Firstly, volunteering is as good for the community as it is for the business. Your presence in the community helps build your brand and increase awareness. Second, you create an opportunity to connect directly with the community, and often you learn first-hand how your brand is perceived and about the needs of your customers.

Network

Joining a chamber of commerce, attending corporate functions or meeting with people individually over coffee or lunch are a few of many ways of forming and building personal and business relationships. The key is to go out of your way to help others first, whether that is through advising, connecting people or generating ideas. Continue to give and it will certainly come back to you.

Promotional Events

Get some publicity! It’s hard to be featured in the newspaper or social media without any activity. Try to get noticed by publishers and other news outlets through:

  • Announcements of new products or services
  • Promotions or samples to get people to try your product or service
  • Holiday events that attract the public and get your company out there

Be An Expert

Establish yourself as a leader in a particular field and demonstrate your credibility to potential customers. Give tips, share experiences or explore some questions and perhaps your customers will reciprocate with interest in your company.

You can try various tools to reach your market audience. You can write a blog article, post a video or host a webinar — and today’s technology makes these very inexpensive.

Targeting

Lastly, you might find that different groups in your market have a different CAC or LTV. For example, college students are easier to acquire because word-of-mouth is a viral growth mechanism (low CAC), but they are already investing their money in education and may be harder to monetize (low LTV). You may want to focus your efforts an target graduating students (still low CAC) who are entering the workforce who can start to afford your product or service (higher LTV).

The key to targeting though, is you need to be able to measure CAC and LTV for different “cohorts” and groups to make this sort of decision. Stay tuned for a future blog post where I share a little more on how to systematically build metrics in your business to make decisive choices instead of intuitive ones!